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Bluebird Bio rises as analysts start coverage

NEW YORK (AP) -- Shares of Bluebird Bio Inc. rose Monday after two analysts started covering the stock with positive views of the company's experimental gene therapies.

THE SPARK: Analysts for JPMorgan and Wedbush started covering Bluebird shares with ratings equivalent to "Buy." Both expect Bluebird shares to keep climbing as the company continues clinical testing of its first products.

"Bluebird's gene therapy platform could provide lifelong cures of genetic diseases with a single procedure, and is potentially applicable to a broad range of inherited diseases," said Wedbush analyst David Nierengarten. Nierengarten initiated coverage with an "Outperform" rating and a price target of $40 per share.

JPMorgan analyst Cory Kasimov said there has been major progress in gene therapies in recent years, and Bluebird's products could allow for powerful one-time treatments. Saying early data for the company's drugs is "compelling," Kasimov set an "Overweight" rating with a price target of $44 per share.

THE BIG PICTURE: Bluebird, of Cambridge, Mass., is developing gene therapies for severe genetic and very rare diseases. The company's most advanced experimental therapy is designed to treat childhood cerebral adrenoleukodystrophy, a group of inherited disorders that damage the fatty coverings that protect the brain's nerve fibers.

The symptoms of childhood cerebral adrenoleukodystrophy appear early in a patient's life. The Cleveland Clinic says it is the most severe form of the disease, and patients typically die within 10 years after symptoms begin.

Bluebird also announced a partnership with biotechnology company Celgene Corp. in March. The companies will work together to develop therapies that use a patient's own T-cells to target cancer cells. Bluebird received an upfront payment and could get up to $225 million in option and milestone payments for each product the companies develop.

SHARE ACTION: Bluebird Bio shares gained $2.06, or 6.7 percent, to $32.71 in afternoon trading after rising as to a new high of $33.20 earlier in the session. The company completed its initial public offering in June. The IPO priced at $17 per share.